Your excess solar generation exported to the grid could attract HMRC interest. However....

pensionpawn

QrizB said:

Even at the current (generous) 15p/kWh that some suppliers offer, you'd need to be exporting 7000 kWh/yr before you earned £1000 in import payments.

Allowing for self-consumption that would need a PV system rated at ~10kWp, which is a very large domestic system.

This is unlikely to be an issue for many people, at least as the market and technology currently stands.

My installation is 7.1 kWs with a 6 kW export limit. My aspect is due east / west so I decided to cover all available roof space with panels. That cost more, and I consequently dropped into a lower FiT band, however it was the logical thing to do in the circumstances, especially as my goal in 2015 was to shield myself as much as possible from future energy shock. So I'm only around £400 pa off the trading allowance just from my panels. EVs which  commonly have around 60-80 kWhrs batteries will soon being capable of bi-directional charging, allowing them to power the house or time shift energy. Last year Octopus launched a £300 / month car lease scheme based on this idea / technology. If I were to obtain a bi directional charging EV a daily export of just 16 kWhrs would see the trading allowance breached. This is why I'm asking these questions.

Qyburn

pensionpawn said:

If I were to obtain a bi directional charging EV a daily export of just 16 kWhrs would see the trading allowance breached. This is why I'm these questions.

An EV, with or without a bidirectional charger, doesn't change the amount of electricity your panels generate. If you're gaming the system by importing at a cheap rate and exporting at a higher rate then it seems reasonable to be taxed. 

QrizB

pensionpawn said:

QrizB said:

Even at the current (generous) 15p/kWh that some suppliers offer, you'd need to be exporting 7000 kWh/yr before you earned £1000 in import payments.

Allowing for self-consumption that would need a PV system rated at ~10kWp, which is a very large domestic system.

This is unlikely to be an issue for many people, at least as the market and technology currently stands.

My installation is 7.1 kWs with a 6 kW export limit ... I'm only around £400 pa off the trading allowance

Or, put another way, your larger-than-typical solar PV plant still only uses up 60% of the trading allowance.

pensionpawn said:

If I were to obtain a bi directional charging EV a daily export of just 16 kWhrs would see the trading allowance breached. This is why I'm asking these questions.

Yes, if you're planning a home business in electricity arbitrage, better to understand your tax situaton before it becomes a problem.

However that still won't trouble most domestic PV systems.

pensionpawn

Qyburn said:

pensionpawn said:

If I were to obtain a bi directional charging EV a daily export of just 16 kWhrs would see the trading allowance breached. This is why I'm these questions.

An EV, with or without a bidirectional charger, doesn't change the amount of electricity your panels generate. If you're gaming the system by importing at a cheap rate and exporting at a higher rate then it seems reasonable to be taxed. 

I agree that taxation is inevitable. Just like anyone else in any other financial situation, I'm just trying to establish thresholds, rates and allowances so as to make the right choices.

pensionpawn

QrizB said:

pensionpawn said:

QrizB said:

Even at the current (generous) 15p/kWh that some suppliers offer, you'd need to be exporting 7000 kWh/yr before you earned £1000 in import payments.

Allowing for self-consumption that would need a PV system rated at ~10kWp, which is a very large domestic system.

This is unlikely to be an issue for many people, at least as the market and technology currently stands.

My installation is 7.1 kWs with a 6 kW export limit ... I'm only around £400 pa off the trading allowance

Or, put another way, your larger-than-typical solar PV plant still only uses up 60% of the trading allowance.

pensionpawn said:

If I were to obtain a bi directional charging EV a daily export of just 16 kWhrs would see the trading allowance breached. This is why I'm asking these questions.

Yes, if you're planning a home business in electricity arbitrage, better to understand your tax situaton before it becomes a problem.

However that still won't trouble most domestic PV systems.

Or, hopefully, 30% each of two trading allowances. TBC..

JKenH

For the purpose of calculating tax liability how is is your own consumption calculated?

I can see from my Octopus app that last calendar year that after I imported approx 4250 kWh and exported approx 4000 kWh. I think it is reasonable to assume that my generation was less than my consumption but I generated about 5300kWh. That latter figure is visible from my FiT generation meter. So my real consumption was 5550 kWh 4250 import +1300 self consumed).

In December I added a further 5kWh of panels so most probably my generation will exceed my consumption by a considerable margin. Generation could be around 9kWh  (up 3700 kWh). My import will fall possibly by 2250 to 2000kWh. So my export might increase by around 1450 to around 5450kWh and as my plan was to move to intelligent Flux for the net exporting months, then the majority of export will be around 30p/kwh which would take me way over the £1k threshold. But what for the purposes of the tax test could I demonstrate as my “consumption”?

Just looking at my future annual octopus bill it might appear as low as 2000kWh  (import) but in fact it will be the same  5550 kWh as last year ( but this year made up of 2000 import + 3550 self consumed) 9000 generated less 5450 exported). 

Am I correct in assuming that, to avoid tax (applying the 120% rule) I need to be able to demonstrate consumption of 7500kWh. I.e. I need to self consume an extra 2000kWh or around 6kwh per day?

pete-20-11

Export prices are rumoured to be dropping in the near future, so that might make it harder to use all of the £1000 trading allowance. 

I never intended to make a profit from solar, and I don't think the installer paperwork expected me to either (I think they over estimated how much I consume Vs how much I use).

I wondered if gas consumption would be included in the household consumption calculation, because with that I don't make a profit at all! Those with electric heating vs. those with gas - a discrepancy there?

I got air conditioning installed at the end of last year, so I suspect I'll export less this summer, especially if we have a few heatwaves!

Qyburn

Logically "consumption" must include self-consumption as well as import. Otherwise if you had a perfect system covering all your consumption, then even a single kWh export would exceed that 20% threshold.

greenbee

Qyburn said:

Logically "consumption" must include self-consumption as well as import. Otherwise if you had a perfect system covering all your consumption, then even a single kWh export would exceed that 20% threshold.

Exactly. I’d also expect that the cost of the investment could be offset against any import - so depreciating the capital investment over 10 years (or maybe over whatever the payback period was supposed to be - which would get complicated where installation has been phased) and only been taxed on any import that meets the ‘excess’ criteria over the depreciation allowance.

MWT

It feels like there is a lot of over-thinking going on, HMRC are not going to be concerned with a little excess solar being sold back to your supplier, or a little online buying and selling, hence the £1,000 trading allowance.

If you choose to organise your energy in such a way that you are getting paid over £1,000 a year then yes, they will take an interest and no they are not going to deduct your electricity or gas impost cost from those earnings. 

The idea is that a little incidental exporting isn't a matter for taxation, planning to get an income stream of over £1,000/year is a different situation.